Pulp and paper industry - trends for the future

Pulp and paper industry - trends for the future

We have seen a strong expansion of pulp and paper production during the last 20 years in especially Asia and South America. Many new pulp mills have been erected in Indonesia and Brazil where relatively cheap and fast growing species like Eucalyptus has become very important. Other species like Acacia and hard wood from natural forests have increased. At the same time, many old mills are closed in Europe and NorthAmerica as they get difficulty to compete. Themore expensivewood species aswell as higher salaries and often oldmachines are important factors, but the fact that pulp and paper industry have difficulties to compete on capital for investments in e.g. the US, Canada and Europe makes it difficult to enhance the production also in some existingmills. Due to expandingmarkets in the “new” economies in China, India and Brazil and many other countries, the demand for paper is increasing there. As fiber is a limited resource, recycling of used fibers is becoming even more important. At the same time, we can see that the use of newsprint paper is decreasing due to competition fromelectronicmedia, while packagingmaterial aswell as tissue is increasing. In theUSnewsprint sales have gone down by 48%between 2005 and 2010 (Thorp, 2010). In SPCI (2011), a prediction has beenmade about when newsprint will be “insignificant”. This will be so already by 2017 in the US with the present trend! In UK we will be there in 2019 and in Canada and Norway in 2020. To meet these new demands the large pulp and paper corporations are specializing into more narrow segments of themarket. Storaenso for instance is concentrating a lot of their efforts into packaging according to Jouko Karvinen, CEO (Karvinen, 2011). Due to poor economic conditions in North America Storaenso is also leaving this continent at least concerning production units. Instead, they expand in China, Brazil and in the future also in India, where the markets are growing. Borregard has concentrated a lot on dissolving pulp/viscose and has several partners in different countries. One of them is SAPPI who is now also focusing on dissolving pulp, especially in their South African mills and in the US (SAPPI, 2011). Borregard as well as Domsjö are also producing many different chemicals like lignosulfonate, ethanol and Borregard also Vanilla. As they have sulfite processes this fits very well, and is quite different from many other companies. They are leading the trend towards biorefineries. SCA is concentrating on fine paper and hygiene products (SCA, 2011) but also wind power production in a large on-land wind power farms in Northern Sweden. Södra, owned by the forest owners in Sweden, is concentrating on long fiber pulp for especially the European market. They have no intention to produce paper, as they primarily want to have someone buying their forests to a good price. Energy is important for them, so thus they cooperate with Statkraft on forest based wind power parks at their forest owners land.Another group, Korsnas, is focusing on liquid board, where Tetrapak is the main customer. Here the strategy is to have a few large plants where the production is highly automated. The owners are actually investing a lot in TV-channels, the METRO journal and telephone companies, as a side activity to the pulp and paper. The company also is selling surplus heat to the local municipality, Gavle. UPM has many mills producing printing paper in a declining European market for this type of products. Thus, mills are closing. For the future integration of biomass use for energy and other applications is of interest (Arve, 2001a,b), and the company owns part of a new nuclear power plant in Finland. Other products are Labels and Plywood that can be formed. The company also is expanding in China, where printing papers is still growing fast. In the future, there will be new products for energy, bio-chemicals, Figure 12.1. Ngodwana pulp mill in South Africa, SAPPI.

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